About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Western Cape High Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Western Cape High Court, Cape Town
>>
2010
>>
[2010] ZAWCHC 663
|
|
Investec Bank Limited v Quickvest 229 (Pty) Limited; In re: Gore N.O and Others v Gorremans (12689/2009 1604/2010) [2010] ZAWCHC 663 (14 April 2010)
IN THE HIGH COURT OF
SOUTH AFRICA
WESTERN CAPE HIGH
COURT, CAPE TOWN
CASE NOS: 12689/2009
1604/2010
DATE: 14 APRIL 2010
In the matters between:
INVESTEC BANK
LIMITED
.................................................................................................
Applicant
(Registration no.: 1969/004763/06
And
QUICKVEST 229 (PTY)
LIMITED
....................................................................................
Respondent
(Registration no.: 2004/020585/07)
(In case number 12689/2009)
And between:
STEPHEN MALCOLM GORE
N.O
..............................................................................
First
Applicant
SIVALUTCHMEE MOODLIAR
N.O
........................................................................
Second
Applicant
BANTUBONKE NDUNA
N.O
......................................................................................
Third
Applicant
(In their capacities as the duly
appointed joint provisional liquidators of Quickvest 229 (Pty) Ltd
(in provisional liquidation)
And
PAUL ETIENNE JEAN MARIE GODELIEVE
GORREMANS
...........................
Intervening
Party
REASONS FOR JUDGMENT : 14 APRIL 2010
Rilev, AJ:
[1] On the 9th of March 2010 after
having heard counsel for the applicants in both matters and Mr. Paul
Etienne Jean Marie Godelieve
Gorremans ("Gorremans") and
his attorney Mr. Scheepers and after having read the papers I made
the following orders:
In regard to case no.: 12689/2009:
(1) That the provisional order of
winding-up of the respondent granted on 27 November 2009 and extended
on 3 February 2010 is hereby
made final.
(2) That the costs of the application
shall be costs in the winding up.
In regard to case no. 1604/2010:
(1) The applicants are authorised to
bring this application in terms of section 386(5) of the Companies
Act, No. 61 of 1973 (as
amended) ("the Companies Act");
(2) The applicants are authorised to
exercise the following powers in relation to the administration of
Quickvest (Pty) Limited
(in provisional liquidation) ("Quickvest")
in terms of section 386(5) of the Companies Act:
2.1 to obtain legal advice on any
question of law affecting the administration of Quickvest and to
engage the services of attorneys
and counsel in connection with any
matter arising out of or related to the affairs of Quickvest;
2.2 to agree with such attorneys and/or
counsel on the tariff or scale of fees to be charged by and paid to
such attorneys and/or
counsel for the rendering of services to
Quickvest and to conclude written agreements with attorneys and/or
counsel in the form
contemplated in section 73(2) of the Insolvency
Act, No. 24 of 1936 (as amended) ("the
Insolvency Act"
;), as
read with section 339 of the Companies Act;
2.3 to pay the attorneys and/or counsel
the agreed costs and the disbursements made by the attorneys and/or
counsel out of the assets
of Quickvest as and when such services are
rendered and the disbursements are made;
2.4 to exercise the power in terms of
section 386(4)(a) of the Companies Act to bring or defend any action
or other legal proceedings
as may be necessary;
2.5 to exercise the power in terms of
section 386(4)(h) of the Companies Act to sell any immovable property
of Quickvest by public
auction, public tender or private treaty and
to give transfer thereof;
2.6 to borrow up to the amount of R2
000 000,00 as a cost of administration and to pay interest thereon;
3. The actions of the applicants to
date hereof in respect of the engagement of the services of attorneys
and counsel are hereby
ratified and confirmed;
4. The costs occasioned by the
opposition to this application shall be paid by the Intervening
Party;
5. The remaining costs of this
application shall be treated as costs in the winding-up of Quickvest.
Background
[3] On 27 November 2009, Blignault J
granted a provisional winding-up order in respect of the respondent
following an opposed application
which was heard on the 18th November
2009.
[4] In terms of te rule nisi issued,
respondent was called upon to show cause if any, on 3 February 2010
why a final winding-up
order should not be granted. On 3 February
2010 it was agreed between the parties that the application for a
final order is postponed
for hearing on the semi-urgent roll on 9
March 2010 and that the return day be extended to that date to be
heard together with
the application under case number 1604/2010.
[5] It was further agreed that -
(1) Respondent shall deliver any
further supplementary affidavits by Wednesday, 10 February 2010;
(2) Applicant shall deliver
supplementary affidavits by 19 February 2010;
(3) Applicant shall deliver heads of
argument by 22 February 2010;
(4) Respondent shall deliver heads of
argument by 1 March 2010.
[6] On 3 February 2010 respondent was
represented by Mr. Albertus SC on the instructions of attorneys Johan
Scheepers Inc.
[7] By 3 February 2010 respondent had
failed to file further answering affidavits but it was nevertheless
indicated on behalf of
the respondent that it opposed the granting of
the final winding-up order.
[8] At the time of the hearing of the
application for final winding-up order, respondent had still not
filed any supplementary affidavits.
[9] Respondent had further failed to
serve and file its heads or argument as agreed and notwithstanding a
request for an extension
and an undertaking by Scheepers, failed and
neglected to file its heads of argument by 3 March 2010.
[10] At the time of argument no heads
of argument were filed on behalf of the respondent.
[11] As provided for in the order
granted by Thring J on 3 February 2010 it was agreed between the
parties that the application
for the final winding-up order would be
heard together with the application brought by the provisional
liquidators of the respondent
under case number 1604/2010 for an
order granting to them certain powers in terms of section 386(5) of
the Companies Act. In the
latter application, the sole director of
respondent, Gorremans brought an application for intervention and he
filed an affidavit
in opposition to the relief sought.
[12] It is necessary to highlight the
following events since the granting of the provisional winding-up
order on 27 November 2009:
(1) On 8 December 2009 the Master
appointed the joint provisional liquidators of Quickvest (the
applicants in the section 386(5)
of the Companies Act 61 of 1973 (as
amended);
(2) On 9 December 2009 the first and
second applicants in the section 386(5) application met with
Gorremans and his attorney Mr.
Scheepers;
(3) At the meeting on 9 December 2009
Gorremans was referred to various options in relation to the sale of
respondent's immovable
assets;
(4) On 16 December 2009 the provisional
liquidators sent an email to attorney Scheepers containing a list of
requirements and calling
upon the director to provide the statutory
statement of affairs.
I was advised that as at the date of
the hearing of this application there has been no response to the
request;
(5) On 20 January 2010 an offer was
made by Midnight Masquerade Properties 272 (Pty) Limited to purchase
the respondent's four immovable
properties at a purchase price of
R112 870 000.00;
(6) During mid January 2010 the
provisional liquidators instructed Appraisal Corporation to value
four properties owned by Quickvest;
(7) On 27 January 2010 the application
in terms of section 386(5) of the Companies Act 61 of 1973 was served
on Johan Scheepers
Inc;
(8) On 3 February 2010, the date of the
hearing of the return day of the respondent's winding-up application,
both applications
were postponed in view of the fact that Gorremans
opposed both applications;
On the same day attorney Katz
representing applicants received an email from attorney Shaer who
represented a potential purchaser
in regard to an offer to purchase
properties of respondent;
(9) On the 10th of February 2010 the
second applicant sent an email to attorney Shaer requesting his
client to submit an offer for
the properties should he so wish;
(10) On the 10th of February 2010
Gorremans delivered his opposing affidavit to the section 386(5)
application;
(11) On the 18th of February 2010
attorneys Marais Muller Yekiso Inc sent a letter to applicant's
attorney on the instructions of
Absa Bank Ltd., from which it is
clear that Absa Bank Limited supported the liquidation of Quickvest
and that its assets be realised
for the benefit of the creditors;
(12) On the 19th of February 2010 the
provisional liquidators filed their replying affidavits.
[13] When the matter was heard on the
9th of March 2010 the respondent in the winding- up application was
represented in person
by Paul Etienne Jean Marie Godelieve Gorremans
("Gorremans") who also represented himself in the
application in terms
of section 386(5) the Companies Act 61 of 1973
(as amended) ("the Act"). His attorney of record Mr.
Scheepers was also
present during the proceedings. Eventhough he had
no right of appearance in this court; I also allowed him to address
me in regard
to the two applications before me.
[14] I was advised that the reason why
Mr. Albertus did not appear for respondent or Gorremans was due to
the fact that his last
account, for services rendered, had not been
paid. Gorremans elected to represent the respondent and himself as
intervening party
in person.
[15] In allowing Gorremans to conduct
the case on behalf of the respondent I was mindful of the rule laid
down in Yates Investments
fPtv) Ltd v Commissioner for Inland Revenue
1956 (1) SA 364 (A) where it was held that a company cannot conduct a
case in this
court except by the appearance of counsel on its behalf.
[16] In allowing Gorremans the right of
audience I took into account that Gorremans was the sole director,
had intimate knowledge
of the respondent's business and its financial
affairs. I was also of the view that the circumstances of the matter
was such that
the administration of justice required some relaxation
of the general rule set out above.
[17] I was further guided by the dictum
of Ponnan JA in Manonq and Associates v Minister of Public Works 2010
(2) SA 167 SCA where
on page 172 at para 10 he held that:
"It follows that cases will arise
where the administration of justice may require some relaxation of
the general rule. Their
occurrence, in my view, is likely to be rare
and their circumstances exceptional or at least unusual, I thus
consider that our
superior courts have a residual power to regulate
their own proceedings. After all, it seems to me that the power of a
court to
give leave to a corporation to carry on a proceeding
otherwise than by a legal representative, is of necessity an integral
part
of the rule itself."
[18] I am satisfied that both Gorremans
and his attorney of record were well aware of the nature and the
consequences of the proceedings.
[19] In their address in respect of
both applications both Gorremans and Mr. Scheepers requested that I
postpone both applications
for a period of 50 (fifty) days, since a
new offer to purchase had been received by Gorremans in respect of
the properties:
Erf 15759 Somerset West In the City of
Cape Town Division Stellenbosch, Western Cape Province Extent:
67,4926 H A and Erf 15758
Somerset West In the City of Cape Town
Division Stellenbosch, Western Cape Province Extent: 12219 HA
[20] In support of his argument for the
postponement of the applications Gorremans handed the following
documents to me:
(1) a letter dated 7 August 2009 (faxed
on 1 March 2010) addressed by Scheepers to applicant's attorneys;
(2) a copy of an email dated 9 March
2010 from Gorremans to <sec709@law.co.za, sent at 09:11 am;
(3) a letter dated 9 March 2010
addressed by Unipalm Investment Holdings Ltd to Gorremans;
(4) an unsigned agreement of sale
between respondent and Unipalm Investment Holdings Ltd.:
(5) a valuation from I-Val Consultants
(Pty) Ltd dated 11 November 2009;
(6) an offer to purchase between
respondent and Platinum Orange CC:
(7) A loan agreement between New
Eurasia Impex Limited and Quickvest 326 (Ptvl Ltd. Global Master
Securities:
(8) Lending and Borrowing Agreement
between New Eurasia Impex Limited and Quickvest 326 fPtv) Ltd.:
(9) a letter dated 8 March 2010 from
Sonnenberg Associates addressed to: To whom it may concern.
[21] Goremans relied on the above
documents in his attempt to persuade me that I should postpone the
hearing of the applications
before me for a period of 50 (fifty) days
so that the proposed sale, in particular to Platinum Orange CC could
come to fruition.
[22] Mr. Goodman SC who appeared on
behalf of the applicant and the provisional liquidators objected
vehemently to the postponement
of the applications and was adamant
that I should proceed to hear both applications.
[23] He contended that the documents
referred to above which was placed before me was not properly before
the court and that it
could not be regarded as evidence. He further
contended that all that Gorremans was once again doing was to seek a
delay of the
inevitable and that what was occurring was merely a
repetition of what took place in November 2009 when the application
for provisional
winding-up application was heard. Since Gorremans was
desperate and clearly wanted me to have sight of the documents I
allowed
a relaxation of the rules and allowed him to argue for the
postponement with reference to the documents referred to by him.
[24] In considering the request by
Gorremans for a postponement of the applications, I place strong
reliance on what was said by
Blignault J in his judgment relating to
the application for the postponement of the provisional winding-up
proceedings of the respondent.
I agree fully with the principles set
out in his judgment relating to postponements of applications of this
nature and accordingly
regard them as being equally applicable in the
present applications.
[25] What makes matters worse for
respondent and Gorremans in the present applications is that since
the judgment of 27 November
2009 and, eventhough Gorremans has
allegedly been vigorously involved in trying to sell the properties
he has failed, refused and
neglected to either keep in touch with the
provisional liquidators and or to keep them abreast of developments
i.e. his attempts
to sell. It is not unreasonable to conclude that
his conduct illustrates a failure and refusal to co-operate or work
with the provisional
liquidators.
[26] When I questioned both Gorremans
and attorney Scheepers about this they could give no reasonable
explanation for their failure,
refusal and or neglect to liase with
the provisional liquidators. Gorremans seemed adamant that the
liquidators were not acting
in good faith and or that they were not
acting in the best interest of the respondent and or himself.
[27] I can find no basis for this
allegation by Gorremans and accordingly reject it out of hand.
[28] I was therefore of the view that
no good grounds existed why I should grant Gorremans and or the
respondent a postponement
of the present proceedings.
[29] I accordingly refused to grant a
postponement.
[30] In considering the application for
the final winding-up order I take into account that respondent has
failed to file any supplementary
answering affidavits eventhough it
had the opportunity to do so since 18 November 2009. Neither
Gorremans or Mr. Scheepers could
give a reasonable explanation for
this.
[32] I also take into account the
following facts and circumstances which are relevant to the
application for the final winding-up
order. These facts and
circumstances are succinctly summarised in the applicant's heads of
argument as follows:
(1) Gorremans accepts that the
respondent "is commercially insolvent" inasmuch as it is
unable to pay its current liabilities;
(2) That he wishes to emphasize that he
was in no way seeking to frustrate the winding-up process;
(3) in criticising the provisional
liquidators for not having explored the market for a fair price for
the properties owned by the
respondent he raises "the interests
of all" parties in the winding-up process;
(4) he suggests that the provisional
liquidators should obtain consent at the meetings of creditors and
members or from the Master
under section 387 of the Act.
[33] The factual background to this
application was dealt with comprehensively by Blignault J iri his
judgment relating to the provisional
winding-up order.
[34] I do not intend repeating it.
[35] It is common cause that
respondent's major creditors are the applicant whose claim now stands
at R108 000 000. Interest accrues
on this account at the rate of ±
R1 million per month. Absa Bank has a claim of over R25 million. Both
applicant and Absa
Bank are secured creditors and both are in favour
of a winding-up order.
[36] In my view the facts referred to
above, the failure on the part of Gorremans and or the respondent to
file further replying
answering affidavits and the desperate last
attempt to obtain a postponement of these proceedings are all
indicative of the fact
that Gorremans and the respondent have
accepted that respondent will be wound up.
[37] It is common cause that Gorremans
on his own admission has been desperately attempting to sell some of
the respondent's properties
since June 2009 in an attempt to settle
its huge indebtedness to the applicant. As at date of the hearing of
this application he
was still unsuccessful in his attempt to sell the
properties.
[38] It is unnecessary to deal with
Gorremans previous attempts to sell the properties referred to above
since Blignault J dealt
fully with the Katoto deal and the serious
questions raised of and about it. What is clear at this stage is that
the Katoto deal
which in November 2009 was on the brink of being
finalised, has not been finalised at all. The guarantees which,
according to attorney
Scheepers, would be available early in January
2010 has not materialised at all.
[39] In my view there is in any event
no certainty in regard to the further proposed sales which Gorremans
and Scheepers referred
to in the present application for postponement
and the inevitable conclusion I must come to is that the reference to
the "new"
offers to purchase is just but further "pie
in the sky" promises in an attempt to stave off the inevitable.
[40] In his judgment on the provisional
winding-up of the respondent Blignault J held at para 43-45 that:
"...The test is whether applicant
has established a prima facie case in the sense of a balance of
probabilities on all the
affidavits. See Kali v Decotex fPtvl Ltd and
Another 1988 (1) SA 943 (AD) at 978J - 979 B.
[44] The only real defence raised by
respondent is that applicant breached the loan agreements which gave
rise to the judgment taken
by CSV. Apart from the fact that the
alleged breach has been denied by Ms Folpini it was superseded by the
agreement whereby the
debt was restricted. This refutes the
allegation that the respondent still had a claim for damages against
the applicant.
[45] I am satisfied that applicant has
made out a proper case for the provisional winding-up of respondent."
[41] I concur with the aforesaid
reasoning of Blignault J.
[42] There are no further affidavits
before me to oppose a final winding-up order. In this matter the
applicant has been more than
patient with the respondent and has
allowed respondent much indulgences. Based on the history of the
matter I find that respondent
and or Gorremans have abused the
process and have not acted in good faith.
[43] As was held by the court in
Terblanche and Others v Offshore Design Co. (Ptv) Limited 2001 (1) SA
824 (C):
"...In my view the need to show
good cause for a postponement is even more acute, where; as in the
instant case, an unpaid
creditor, in the absence of opposition on the
part of other creditors, is entitled to seek an order of winding-up
ex debito justitiae
because he or she has brought himselfor herself
within the winding-up provisions of the Companies Act and accordingly
is justified
in refusing to allow a respondent any further
indulgences..."
[44] It is trite law that the Court's
power to grant a winding-up order is a discretionary power,
irrespective of the ground upon
which the order is sought. I am
mindful of the fact that the discretion must be exercised on judicial
grounds and that I should
have regard to the grounds and reasons for
the proposed winding-up.
See: Henochsbera on the Companies Act -
Meskin Vol. 1 at page 344.
[45] In my view no bona fide and or
reasonable grounds has been presented to me why a final winding-up
order should not be granted
in respect of the respondent.
[46] I am accordingly satisfied that it
is just and equitable that respondent should be wound up.
The application in terms of section
386(5) of the Companies Act 61 of 1973 (as amended) ("the
Companies Act").
[47] Section 386(5) of the Companies
Act provides that -
"a Court may if it deems fit grant
leave to a liquidator to raise money on the security of the assets of
the company concerned
or to do any other thing which the Court may
consider necessary for the winding-up of the affairs of the company
and distribution
of its assets."
[48] The applicants have essentially
asked the court to grant them the following powers:
(1) to engage attorneys and counsel;
(2) to sell the immovable property of
Quickvest by public auction, public tender or private treaty and to
give transfer thereof;
(3) to borrow an amount of up to R2
million.
[49] Applicants aver that it is
necessary to inter alia investigate the amounts of R24,8 million and
R22 million which, according
to the financial statements of Quickvest
are allegedly owing to shareholders. The reason the investigation is
required is due to
the fact
that such indebtedness appears to have
been sub-ordinated and Gorremans has not enlightened the court about
the status of the sub-ordination
agreements.
[50] Applicants aver further in their
founding affidavit that there are a number of legal issues which
require investigation namely:
(1) the fact that the financial
statements reflect that Quickvest has significant assets in and
claims against its subsidiaries;
(2) that certain assets of a
subsidiary, Quickvest Supplies and Services (Pty) Ltd appear to be in
the process of dissapation in
circumstances where Quickvest Supplies
and Services (Pty) Ltd owes Quickvest approximately R49 million.
[51] According to the applicants they
will be required to pay large amounts in the administration of
Quickvest. They will also require
costs for security, insurance, the
bond of security and rates.
[52] For the above reasons they seek
the relief as set out in the notice of motion.
[53] In his opposing affidavit
Gorremans avers that there is no other pressing need which would
warrant the borrowing of R2 million.
He does however concede that
there may be amounts payable for insurance on the Brick Factory.
[54] Gorremans further averred that the
liquidation proceedings "are being used for purposes for which
they were never intended"
and that eventhough Quickvest is
possessed of substantial assets that "the applicants are seeking
permission from the court
to sell four properties valued at R306 400
000 for the paltry sum of R112 870 000.00." He also criticised
an attempt to sell
the said properties otherwise than by way of
public auction and alleged that the applicants have failed in any way
to obtain a
fair price for the properties.
[55] In my view there is no factual
basis for the allegations that the applicants are not acting in good
faith. On the contrary
I hold the view that the applicants have been
indulgent with Gorremans and the respondent. Gorremans and the
respondent had since
June 2009 to dispose of some of the respondent's
assets. He has failed to do so.
[56] It is regrettable that Gorremans
has failed and refused to co-operate with the applicants but rather
continuous to treat their
actions with suspicion. He could not give a
reasonable explanation why he did not keep the applicants abreast of
his further attempts
to secure a purchaser for the property. Instead
he once again sought to obtain a postponement at the hearing by
producing documents
and "offers to purchase". He must have
known that applicants would not agree to the request for the
postponement.
[57] I am not persuaded that the
conduct of the applicants thus far have been designed to cause
prejudice and or unfairness to the
members of Quickvest.
[58] What is particularly telling is
that eventhough attorney Shaer's client showed an interest in
purchasing the respondent's properties
and eventhough first applicant
invited him to contact him, neither Shaer or his client has been in
contact with the liquidators
or first applicant to pursue the
proposed purchase.
[59] I accordingly agree with the first
applicant that in view of "Gorreman's previous promises
regarding the sale of properties,
none of which has ever come to
fruition, the applicants and the secured creditors were not prepared
to risk postponing the liquidation
application once again based on an
uncertain sale".
[60] The approach of the applicants in
the circumstances are prudent.
[61] I have no reason to doubt first
applicant where he states that:
"The applicants have a duty to
maintain an even and impartial hand between all the individuals
(which include both creditors
and members) whose interests are
involved in the winding-up of Quickvest"
[62] In the circumstances the
applicants are obliged by law to take not only the interest of
creditors but also most of the members
into account in the
administration of Quickvest. See record pages 265-266.
[63] Gorremans does not dispute but in
fact accepts that the immovable properties need to be realised in
order to discharge the
claims of creditors. His chief concern seems
to be "the mode of realisation thereof."
[64] All the evidence before me point
to the fact that -
"should the applicants be granted
the power to sell the properties, all possible methods of realisation
of such properties,
including a sale by public auction\ will be
considered (taking into account the interest risks involved in such
method of sale)
in order to achieve the outcome most beneficial to
the creditors (and ultimately also the members) of Quickvest"
See record at page 267.
[65] I have concerns that based on the
conduct of Gorremans, thus far, that either he or the members of
Quickvest will attempt to
frustrate the sale of the respondent's
assets and will in all likelihood not adopt the requisite
resolutions.
[66] Accordingly I find that in the
interest of Investec and Absa and the members of the respondent that
the properties be realised
as urgently as possible.
[67] In coming to my conclusion I am
guided by the following:
(1) That the law requires the creditors
of the company as the best judges of their own interests.
(2) That the creditors have the right
to determine the manner and conditions upon which assets of an
insolvent estate are to be
realised.
(3) The court has a complete discretion
when a liquidator applies to the court for
leave to sell property in the estate of
a company.
(4) That a most important consideration
in favour of granting the application was the fact that the creditors
represent approximately
86% in value of the companies' liabilities
and have agreed that the provisional liquidator should be granted the
power to sell.
See in this regard Kanderssen (Pb/)
Limited v Bowman IM.0.1980 (3) SA 1142 (T) at 1146-1148.
[68] I find that Gorremans has advanced
no proper or valid basis for opposing the granting of any of the
other powers sought by
the applicant.
result I granted the applicants relief
as set out above.
Riley AJ